Part 2: Timeliness in annual reporting

2.1
In this Part, we describe when local authorities adopted their annual reports and publicly released their annual reports and summary annual reports. We also describe the importance of the statutory requirements for adopting annual reports and their public release.

2.2
The Local Government Act 2002 requires local authorities to:

• complete and adopt an annual report – containing audited financial statements and service performance information – within four months after the end of the financial year;
• make the annual report publicly available within one month of adopting it; and
• release an audited summary of the annual report within one month of adopting the annual report.

2.3
The statistics we use were compiled on 26 January 2016. Appendix 1 sets out more detail on when local authorities adopted and publicly released their annual reports and summary annual reports.

Adopting annual reports

2.4
For 2014/15, Ruapehu District Council and Wairoa District Council failed to complete and adopt their audited annual report within the statutory deadline. Ruapehu District Council also failed to meet its statutory reporting deadline for 2013/14.

2.5
Local authorities need to know – and have appropriate procedures to meet – their statutory obligations. Figure 4 shows the number of local authorities that have failed to meet the statutory deadline for adopting their annual report in the last five years.

Figure 4
Local authorities' performance in not meeting the statutory deadline for adopting annual reports, 2010/11 to 2014/15

2.6
Of the 76 local authorities that adopted their annual reports before the statutory deadline, 32 did so in the last week of October, one week before the deadline. Some local authorities planned to adopt their audited annual report in the last week of October because that was when the council had its next scheduled meeting.

2.7
However, about 30% of local authorities that adopted their annual report in the last week of October did so at an extraordinary council meeting. This could indicate that local authorities had delays in the preparation and then the auditing of their annual reports and had to schedule a last-minute meeting to meet deadlines. This situation creates extra pressures on those who prepare and those who audit annual reports.

2.8
Local authorities will need to carefully consider their annual report adoption in 2016 to take into consideration the local body election time frames.

Public release of annual reports and summary reports

2.9
The public release of audited annual reports has improved on previous years.

2.10
Of the local authorities that adopted their annual report within the statutory deadline, one local authority missed the one-month deadline for releasing its annual report to the community. Three local authorities missed the one-month deadline for releasing their summary annual reports (see Figure 5).

Figure 5
Number of local authorities that met statutory deadlines for release of annual reports and summary annual reports, 2010/11 to 2014/15

* Out of the 76 that had met the statutory deadline for completing and adopting the annual report.
** The 2013/14 statistics for public release dates do not include the two local authorities that adopted their annual reports after 5 December 2014.

The importance of timely reporting

2.11
Annual reports provide information that helps communities to assess how well their local authority performs. For communities to do this effectively, the information must be accurate, useful, and timely. We discussed this in our May 2015 report, Being accountable to the public: Timeliness of reporting by public entities.

2.12
Releasing annual reports and summaries is an important way for local authorities to be accountable to their communities. The summary is the most accessible and understandable information for most readers. It is also the easiest document to circulate and make widely available.

2.13
In our view, many local authorities need to better manage how they produce and publish their annual and summary annual reports.

2.14
Most local authorities publish their annual report on their website. Local authorities should be able to publish their annual reports on a website within a few days of adopting their annual reports. We expect all local authorities to be able to achieve this.